On August 30, 2022, the U.S. Court of Appeals for the Fifth Circuit issued an order in NextEra Energy Capital Holdings, Inc. v. Lake, a case raising dormant Commerce Clause challenges to a 2019 Texas law that bans new entrants from building transmission lines that are part of a multistate electricity grid.  The majority reversed the lower court’s Rule 12(b)(6) dismissal of NextEra’s petition, thereby allowing the case to proceed to trial in district court.
Continue Reading 5th Circuit Holds that Texas Law Permitting Blocking of Competitive Transmission Owners from Building New Lines Violates the Commerce Clause

On July 15, 2022, a FERC Administrative Law Judge (“Presiding Judge”) issued an initial decision in a proceeding involving the “threshold” issue of whether four solar generating facilities (collectively, “Facilities”) interconnected at the distribution level are eligible to receive reactive power compensation under Schedule 2 of the PJM Interconnection, L.L.C. (“PJM”) Open Access Transmission Tariff (“Tariff”). The Presiding Judge concluded that the Facilities are ineligible to receive reactive power rates because the facilities in question did not satisfy the so-called capability requirement, as explained further below.
Continue Reading FERC Judge Rules that Four Solar Generators Interconnected at the Distribution Level Are Ineligible to Receive Reactive Power Compensation Under PJM’s Tariff

On July 8, 2022, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued its decision in City of Oberlin, Ohio v. FERC, a proceeding involving the issue of whether FERC properly granted NEXUS Gas Transmission, LLC (“Nexus”) a certificate of public convenience and necessity to construct and operate a natural gas pipeline that will facilitate exports into Canadian markets (“Project”).  The Court upheld the certificate.
Continue Reading D.C. Circuit Allows Natural Gas Pipeline Certificate to Stand, Accepting Export Precedent Agreements as Probative of Need

On June 16, 2022, FERC issued two Notice of Proposed Rulemakings (“NOPRs”) aimed at improving the reliability of the bulk power system against threats of extreme weather. The NOPRs build on the June 2021 Technical Conference on Climate Change, Extreme Weather, and Electric System Reliability, which revealed an industry-wide need to assess current vulnerabilities of the transmission system to weather-related risks.
Continue Reading FERC Proposes Rules to Address Extreme Weather

On June 16, FERC issued a Notice of Proposed Rulemaking (NOPR) focused on updating procedures for interconnecting large generating facilities (20MW and above) and small generating facilities (under 20MW). The NOPR proposes significant updates to FERC’s pro forma interconnection procedures, which were first established in the early 2000s. In the intervening years, however, the nation’s generation fleet has evolved, new technologies have emerged, and interconnection wait-times have steadily increased. The NOPR proposes various reforms to help address growing interconnection queue backlogs and process delays. Comments are due 100 days after the NOPR’s publication in the Federal Register. Reply comments are due 130 days after publication in the Federal Register.

Below is a summary of the primary reforms outlined in the NOPR, which fall into three broad categories: (1) implement a first-ready, first-served cluster study process; (2) increase the speed of interconnection queue processing; and (3) incorporate technological advancements into the interconnection process. FERC’s proposed reforms are discussed further in the full summary, linked below.
Continue Reading Summary of FERC Interconnection NOPR

On May 31, 2022, FERC accepted and set for hearing Southwest Power Pool, Inc.’s (“SPP”) proposal to revise its Open Access Transmission Tariff (“OATT”) to establish a formula rate template (“Formula Rate”) on behalf of People’s Electric Cooperative (“People’s Electric”) when People’s Electric transfers functional control of its transmission facilities to SPP on June 1, 2022. The Commission granted People’s Electric’s request to include a 50-basis point adder for participating as a member of SPP, a regional transmission organization (“RTO”). Commissioner Christie wrote separately in concurrence to express his continued support for limiting the RTO participation adder to three years.
Continue Reading FERC Approves ROE Adder for SPP Membership, Prompting Statement from Commissioner Christie